China has designated three pilot areas to regulate cash transactions in large amounts amid efforts to strengthen cash circulation management and curb illegal activities, the central bank said.
China’s central bank, the People’s Bank of China (PBOC), has announced that it will pilot a restriction on large-scale cash transactions in three regions of the country. The trial is going to be carried out next month.
We have introduced the trial in our previous article, you can click the following link to read more:
The latest notice has released some further details, let’s check!
According to the trial plan, it will be applied in Hebei province, Zhejiang province and Shenzhen city. Hebei Province will start the two-year pilot program in July, while Zhejiang Province and the city of Shenzhen will start the experiment in October.
All three pilot areas will regulate cash transactions with different thresholds based on the regions and the type of accounts:
500,000 yuan (about $70,600) or above
According to the PBOC, the thresholds are set to strengthen the monitoring of abnormal cash transactions including those related to tax evasion or dodging supervision, while still meeting the reasonable cash demands of businesses and individuals.
The central bank also said that the regulations will not significantly affect normal daily economic activities as multiple payment alternatives are readily available.
Besides, the set thresholds are higher than most people’s daily cash use, and large cash transactions are not restricted as long as the customers comply with registration rules.
Some experts think that the restrictions are aimed at paving the way for the upcoming digital currency, but we still don’t know much about the digital RMB.
Anyway, the pilot program will encourage reservation-based cash withdrawals in large amounts, establish a system that records, analyzes and supervises large cash transactions, and prevent risks related to such transactions.
With the pilots, the country aims to meet the needs of social and economic development, further improve the cash flow environment and reduce the cost of social management, according to the central bank.
If you get used to paying in cash for the business, you may need to be cautious or learn more about non-cash payment tools now.
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SOURCE | PBOC / Xinhua